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Discom reform implementation critical amid unsustainable debt to Gencos, IPPs: ICRA

March 08, 2021 × The debt level of discoms have gone up post the implementation of the Centre’s UDAY scheme in FY 2016 and are now estimated at close to ₹6 trillion in FY2022. The credit profile of the state-owned distribution companies (Discoms) continues to remain stressed due to higher level of technical and commercial losses compared to regulatory norms, lower tariffs in relation to their cost of supply and inadequate subsidy support from the respective state governments. The debt level of discoms have gone up post the implementation of the Centre’s UDAY scheme in FY 2016 and are now estimated at close to ₹6 trillion in FY2022. There has been a build-up in dues to power generators by 30 per cent to ₹1.27 trillion as of December 2020 on a year-on-year basis.

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